VGP – Since the foreign direct investment (FDI) attraction policy came into effect, Ho Chi Minh City has always been among the localities taking the lead in the field.

FDI has made important contributions to changing the city’s socio-economic quality, from industrial production to commercial-service activities and urban civilization.

In order to meet the needs of development, HCMC has been shifting its FDI strategy towards increasing the content of high technology and environmental friendliness.

Spillover effects of FDI

As of August 2019, there were 8,772 valid FDI projects in HCMC with a total investment capital of US$45.94 billion (including both new and additional pledges).

The manufacturing industry has remained the largest recipient of FDI in the city over recent times with average investment capital of US$9 million per project, higher than the average figure of US$6 million for an FDI project in the city.

The focus of FDI inflows on the manufacturing industry shows that investors have taken advantage of HCMC strength, including low energy costs compared to other cities in the region and an abundant skilled labor force with effective working skills.

According to the Municipal People’s Committee, since 2006, the wave of FDI into the manufacturing sector has tended to focus on the industries such as software industry, informatics electronics, pharmaceuticals, precision engineering, electricity and electronics, software technology, post and telecommunications.

At the same time, the group of services and commerce has always been among the leading FDI recipients in the city, such as supermarkets and trade centers; high-quality education-training and health projects; projects to construct houses, new urban areas and entertainment areas; and transport and goods delivery services.

FDI has made important contributions to changing the city’s socio-economic quality, from industrial production to commercial-service activities and urban civilization

In general, FDI has helped to shift HCM City’s economic structure in line with the dynamic knowledge-based economy of the 21st century.

Selective FDI attraction

HCMC is determined that by 2020, the FDI sector must become an important component facilitating the harmonious development of the municipal economy in both width and depth, promoting local competitiveness.

FDI sector is also expected to help the city maintain its role as the whole country’s financial, industrial, service and commercial hub and become one of the important economic centers in the region and the world.

The city has announced a list of 255 projects calling for investment and will continue luring investment in nine service sectors, including, finance-banking, trade, tourism, logistics, telecommunication, real estate business, science and technology, education, and healthcare.

The above orientations will help the city to effectively implement the spirit and goals set out in the Politburo’s Resolution 50-NQ/TW dated August 20, 2019 on orientations to perfect mechanisms, policies, raise quality and efficiency of foreign investment by 2030.